Transcript of Making The Store Credit Card Decision

“Would you like to save 20% by
opening a store credit card today?”
You hear this a lot at the checkout counter
and saving money is always tempting.
But should you do it?
Store credit cards are offered by many big retailers.
You’ll get that initial discount
and maybe even special incentives
or discounts on future purchases.
If you’re a regular customer
you might want to consider it.
But there can be drawbacks:
Store cards can have significantly higher
interest rates than national brand credit cards
issued by financial institutions.
And some store cards can be used only at that retailer.
Adding a store credit card is a spending decision
and like any spending decision
it’s always best to consider your options first:
Do you really need one more credit card?
Or will it be a temptation to spend
and one more exposure to
possible fraud or identity theft?
Do you shop at this store often enough
to make cardholder benefits worthwhile?
Do you pay your bills in full at the end of the month?
If not, making payments on a high-interest-rate card
can wipe out any savings you received for opening the card.
Have you compared a store card
with a national brand credit card
such as Visa, MasterCard, or American Express
that you could get through your financial institution?
These cards generally have lower interest rates
and can offer reward points
on purchases made almost anywhere.
That means you can shop wherever you find the best price.
It’s important that you know what you’re
getting into when considering a store card.
Do some research on what your options are
before saying ‘yes’ to anything.
Then make a decision that is best for your needs.